Understanding the Determinants of Urban Growth: A Study on the Major Italian Cities

Abstract

Italy has been typically viewed as a strongly heterogeneous country in terms of regional and sub-regional economic performances. On investigating such heterogeneity, this paper examines the determinants of Italian population growth at the urban level between 1991 and 2008. The empirical analysis takes into account various characteristics of the cities - starting from their economic and social structure - and then explores the role of human capital, immigration, agglomeration economies and territorial capital. The main finding is that the cities with higher sectorial diversity, younger population, higher initial share of foreign residents have grown faster during the period 1991-2008. It has been also found that higher initial unemployment rates are strongly associated with slower population growth and that spatial effects play an important role as well. The ability of a city to share common visions and develop collective actions is also associated with faster growth.

Keywords: cities, economic growth, territorial capital

JEL Classification: O18, O40, R1, R11